Why Are Earnings Kinky? An Examination of the Earnings Management Explanation

Prior research has documented a kink in the earnings distribution: too few firms report small losses, too many firms report small profits. We investigate whether boosting of discretionary accruals to report a small profit is a reasonable explanation for this kink. Overall, we are unable to confirm that boosting of discretionary accruals is the key driver of the kink. We caution the use of the ratio of small profit firms to small loss firms as a measure of earnings management. We investigate and discuss a number of alternative explanations for the kink.     

Political and Regulatory Risk: Beta Sensitivity in U.K. Electricity Distribution*

To establish price caps, regulators must determine appropriate returns for utilities capital employed. This paper uses the techniques of the Kalman Filter to estimate daily betas for the U.K.s regional electricity companies in the period from privatization to end-1998. The paper demonstrates that utilities risk is time-variant, and establishes significant political and regulatory influences in the systematic risk faced by shareholders. It finds beta to be mean reverting, with little evidence of cyclical variation across the regulatory review cycle. The paper confirms the prevalence of significant excess returns in U.K. privatized electricity distribution and suggests that over-estimation of the systematic risk faced by investors may imply further excess returns in the next regulatory review period.     

Acculturation levels and shopping orientations of Asian-American consumers

The study investigated (a) shopping orientations of adult, Chinese-and Filipino-American consumers living in San Francisco, (b) their acculturation levels, and (c) relationships between acculturation levels and shopping orientations. A mail survey, sent to a random sample (N = 124), included the Suinn-Lew Asian Self-Identity Acculturation scale (SL-ASIA), 41 shopping orientation statements, and demographic items. Factor analyses resulted in four SL-ASIA factors and 10 shopping orientation factors. Results of t tests showed statistically significant differences in responses to two shopping orientation subscales (shopping sex roles and shopping opinion leadership) between high and low acculturation groups. Findings suggest that certain shopping-orientation constructs are more closely linked with acculturation of Asian-Americans than other shopping-orientation constructs. © 1997 John Wiley & Sons, Inc.     

Understanding the Theoretical and Empirical Content of Critiques of U.S. Job Creation Research

Although the hypothesis that small firms create the majority of net new jobs is widely believed, a number of researchers have attacked this using empirical data. Since these attacks have been presented as corrections of past methodological errors, their authors may influence policy makers. This paper argues that the substance of these attacks is a difference in theoretical perspectives even though the researchers claim to focus on methodological differences. This paper explains the two underlying economic theories and then reviews the job creation research to demonstrate the relationship between theory and methodology.The theory discussion and methodological results demonstrates that all methodologies used to calculate small firms share of net new jobs are incorrect for analyzing the dynamics of capitalism. The appropriate methodology for understanding economic growth is analysis of new employment created over time by cohorts of newly formed firms. Recognition of this fact, combined with describing the empirical research supporting this approach, reinforces the use of economic development policies designed to promote entrepreneurship.     

Social disruption theory and crime in rural communities: Comparisons across three levels of tourism growth

The study compares rural tourism places under different growth levels in terms of crime effects. Adopting social disruption theory, the study hypothesized that average crime rates would differ for tourism counties with different growth levels, and that high growth tourism counties would experience the greatest increase in average crime rates. The study used data from a sample of rural Colorado tourism communities. Results partially supported the hypothesis and confirmed some results of the relationships between rapid growth and crime identified in previous boomtown studies. The results of the study provide useful insights to public leaders and policy makers engaged in processes of evaluating alternative tourism growth strategies for their community.     

Using social marketing to increase breast cancer screening among African American women: perspectives from African American breast cancer survivors

• Despite progressive preventative techniques, intervention programs, and guidelines to help reduce breast cancer mortality, African American women (AAW) remain affected by breast cancer in greater numbers compared to Caucasians. As rates of breast cancer mortality continue to increase among AAW, a greater need for change emerges, which should include crafting culturally specific social marketing programs that promote breast cancer awareness among AAW. This exploratory study focuses on social marketing strategies to promote this awareness. The research underscores several social marketing strategies from the perspective of AAW (N = 130) breast cancer survivors. Qualitative data were collected from focus groups regarding social marketing strategies needed to promote breast cancer awareness. The discussions revealed social marketing campaigns that are culturally sensitive and unswerving are more likely to increase behavior modification. Furthermore, messages from other AAW tailored toward a specific market are more beneficial for promoting breast cancer screening.

Copyright © 2008 John Wiley & Sons, Ltd.